Quick Answer
Your marginal tax rate is the rate on your last dollar (your tax bracket); your effective tax rate is your total tax divided by total income (your true average). Thanks to progressive brackets, effective is always lower. A single filer earning $75,000 in 2026 is in the 22% federal bracket but pays an effective federal rate of only ~10.5%. Use your marginal rate for decisions about extra income; use your effective rate to understand your overall burden.
"I'm in the 22% bracket" and "I pay 22% in taxes" are two very different statements — and confusing them leads to bad money decisions, like turning down a raise. Here's the difference between your marginal and effective tax rates, with real 2026 numbers.
Two rates, two jobs
Marginal rate
The rate on your last dollar — your tax bracket. It's what a raise, bonus, or extra deduction is taxed at.
Effective rate
Total tax ÷ total income — your true average. It's what your overall tax burden actually is.
The layered math (2026)
Progressive brackets tax income in slices. Here's a single filer with $75,000 of income, after the $16,100 standard deduction ($58,900 taxable):
| Bracket | Income in it | Tax |
|---|---|---|
| 10% | First $11,925 | $1,193 |
| 12% | $11,925 – $48,475 | $4,386 |
| 22% | $48,475 – $58,900 | $2,294 |
| Total federal income tax | ≈ $7,872 | |
Which rate to use, and when
- Marginal — for a raise, bonus, side income, or a 401(k) contribution. These are taxed at (or save you) your top rate. See what a raise really adds.
- Effective — to understand your total burden and budget for your annual tax bill.
Don't confuse the two. A raise never costs you money by "pushing you into a higher bracket" — only the dollars above the threshold are taxed higher, and your effective rate barely moves.
See both rates for your income with the tax bracket calculator, or get your full liability with the federal income tax calculator.